The latest figures from the Office for National Statistics indicate a nuanced economic environment in the UK, where employment rates have increased but pay growth has slowed.
- Between July and August 2024, there was a slight decrease in payrolled employees, yet a significant annual increase was observed by August 2024.
- Despite a rise in regular earnings, the growth in total earnings, including bonuses, has been modest.
- Real-term pay adjustments show a positive trend against inflation, although vacancies have seen a decline.
- Officials urge caution in interpreting these figures due to ongoing improvements in survey responses.
The Office for National Statistics (ONS) has reported an increase in the UK employment rate to 75% for individuals aged 16 to 64, covering the period from June to August 2024. This marks both a quarterly and annual rise compared to previous estimates, a positive sign for the labour market. However, the growth in pay has not mirrored this upward trend.
During the months of July to August 2024, the number of payrolled employees exhibited a minor decrease of 0.1%, translating to approximately 35,000 individuals. Nevertheless, when observed on a year-on-year basis, there was a 0.5% increase totalling 165,000 employees by August 2024, signalling a longer-term positive development.
The annual growth rate for employees’ average regular earnings, excluding any bonuses, was recorded at 4.9% between June and August 2024 in Great Britain. Meanwhile, the total earnings growth, which factors in bonuses, was slightly lower at 3.8%. This indicates that while employees are earning more, the rate of increase has slowed compared to previous periods.
When adjusted for inflation, the real-term growth rate of regular pay stood at 1.9% for the aforementioned period, with total pay growth at 0.9%. According to David Freeman, the head of the ONS labour market and household division, the previous year’s one-off payments to public sector workers have impacted the current total pay growth figures.
Freeman advises caution in interpreting these figures due to improvements in survey response rates, which may affect the data’s precision. Despite a broadly stable payroll over the past three months, the labour force survey presents a different narrative. Additionally, while overall vacancies have declined across most sectors, they remain slightly above pre-pandemic levels, highlighting a still active job market.
The data illustrates a complex interplay between employment gains and slower pay growth, underscoring the need for cautious interpretation of labour market trends.
